Institutional investors flocked to buy shares in India’s state-run insurance giant Life Insurance Corporation (LIC) in a $2.75 billion (£2.18 billion) initial public offering. Bidding for anchor investors began on May 2, but the general share auction begins on May 4 and ends on May 9.
Because of the Ukraine crisis and the outflow of institutional capital from the stock market, the IPO, which was originally scheduled for February, was postponed.
About $16 billion in foreign capital has departed Indian markets since January. The size of LIC’s offering, which was originally set at 5%, has been reduced to 3.5%. A total of 20% of the shares are available to international investors, with the remaining 10% reserved for policyholders.
General investors can purchase equity shares for $11.75-12.36 (£9.38-9.87) per share in a price range of $11.75-12.36 (£9.38-9.87). According to documents submitted by India’s securities regulator, policyholders, employees, and investors will be eligible for an additional discount of up to 60 rupees ($0.79) per share.
The life insurance company LIC is the country’s oldest and largest. On September 1, 1956, it was founded with an initial capital of Rs 5 crore by merging and nationalizing 245 private life insurance companies. LIC is the fifth-biggest life insurer in the world and the country’s largest asset manager.
Its asset base exceeds $500 billion, which is more than the GDP of some countries. It manages almost 280 million policies, which is four times more than the whole population of the United Kingdom. It is also India’s largest asset manager, with significant holdings in government and central government securities, as well as the stock market.
Millions of people trust LIC, and it has a huge reach across the country, making it India’s second-largest savings shelter after bank accounts. LIC enjoyed a monopoly in India’s insurance business until 2000, and it remains the most powerful participant, controlling almost two-thirds of the market. LIC is the market leader, with a 66 percent market share as of 2021, more than two decades after private competition was authorized.
